The new fund will be overlooked by Parth Jindal, who is pursuing an MBA at Harvard Business School, according to a person directly familiar with the matter.Madhav Chanchani | ET Bureau | September 02, 2015, 08:36 IST

The new fund will be overlooked by Parth Jindal, who is pursuing an MBA at Harvard Business School, according to a person directly familiar with the matter.MUMBAI: Investing in internet startups is increasingly catching the fancy of India Inc's biggest chieftans, and the latest to join the list is billionaire Sajjan Jindal, who has formed a venture capital fund of up to Rs 100 crore, to invest in early-stage startups in the internet and technology space.

The fund — JSW Venture Fund — will invest proprietary capital of the family and not as a strategic investment vehicle, according to three people familiar with the matter. The new fund will be overlooked by JSW scion Parth Jindal, who is currently pursuing an MBA at Harvard Business School, according to one person directly familiar with the matter.

"The family wants to participate in the startup ecosystem. They think they need to back entrepreneurs, these investments will also generate returns besides what can be learned as a group from the space," said this person.

The group has roped in Gaurav Sachdeva, former general manager of strategic investments at Brand Capital, to lead the activities of JSW Venture Fund. Brand Capital is part of the Times Group, which publishes this newspaper.

"It is a proprietary fund. Gaurav has been hired to set up the fund from scratch. They will do earlystage funding only," said another person aware of the developments.

While the fund still has to get approval from markets regulator Sebi, it has already started talking to entrepreneurs and other VCs for co-investments. JSW Venture Fund is eyeing a sweet spot of Rs 3-6 crore per deal, investing across seed to Series-A rounds of funding. Ecommerce, business-tobusiness services, tech-oriented and enabling startups are on its radar for deals.

Email sent to JSW Group remained unanswered till the time of going to press. Messages sent to Parth Jindal also did not elicit any response.

While the move towards investing in startups is a first, JSW Group has been investing in areas far from its core business. Sports is one such example. Jindal, who counts mountaineering and playing squash as his hobbies, has set up a JSW Sports Excellence Program to fund and mentor athletes to increase India's medal count at the Olympics. His football enthusiast son Parth is the CEO and managing director of Group-owned football club Bengaluru FC.

Jindal's initiative, whose $11-billion JSW Group has interests in core sectors of the economy such as steel, cement, power and infrastructure, comes at a time when the startup ecosystem in India has been flourishing.

The move comes as several large Indian conglomerates and corportate chieftans such as Tatas, Reliance, Birlas have started engaging or investing in startups.

Tata Group chairman emeritus Ratan Tata had invested in over a dozen startups since last year, from etailers such as Snapdeal and UrbanLadder to cab aggregator Ola more recently.

Others like Wipro's Azim Premji and Infosys's Narayana Murthy also have venture capital arms, while Mukesh Ambani's Reliance Industries and Aditya Birla Group have set up accelerators and incubators. "In India, large business houses are more attuned to play the digital and startup ecosystem financially as their first betting. As they get more experience, they will decide to make it more strategic," said Bharat Banka, who has worked in Aditya Birla Group for over two decades and is advising conglomerates on investments in digital businesses.

A recent report by Kotak Wealth Management stated that technology, combination of IT and ecommerce, has become the most preferred sector for private equity and venture capital investments by HNIs. 39 per cent of the HNIs surveyed wanted to invest in technology venture capital funds, while the number for real estate stood at 35 per cent, financial services 23 per cent and pharmaceuticals 22 per cent.

While the interest of business houses is driven by the desire to peek into new-age businesses, the interest of gen-next businesses is also driving their moves.